Choose Correct answer Final Exam Chapters 10-20 BUS 187 section 9 Name: Date: Mu
ID: 1130305 • Letter: C
Question
Choose Correct answer
Final Exam Chapters 10-20 BUS 187 section 9 Name: Date: Multiple Choice Questions (30) 1/ By the late 90's Korea had become accustomed to an ever expanding economy, their large industrial conglomerates or Chaebols continued to invest huge amounts of capital borrowed in Eurodollars which charged low rates, this caused: a/ overinvestment in production capacity causing prices to plunge, Chaebols having difficulty b/ the Korean government to subsidize these loans at the expense of the Korean taxpayers. repaying the loans and the Korean currency to loose value. c/ the Korean banks to refinance many of the Eurodollar loans the Chaebols made in the London market. d/all of the above. 2/ Firms that focus on increasing profitability and profit growth by reaping the cost reductions that come from economies of scale, learning effects, and location economies, pursue a a/ international strategy b/ global standardization strategy c/ localization strategy d/ transnational strategy 3/ An effective incentive system needs to have the following characteristics: a/ it has to make sure the incentive scheme is linked to an output target the employee has some control over and/or can influence. b/ the incentive systems in multinational companies have to be adjusted to account for national differences in institutions and culture. c/ managers need to carefully think thru exactly what behavior certain incentives encourage. d/ all of the above. 4/ The reason(s) international acquisitions fail is/are a/ the acquiring firm often overpays for the assets of the acquired firm b/ integration of the operations often run into roadblocks and take much longer than forecast. c/ because cultures of the acquiring and acquired firms clash d/ all the above 5/ The characteristic(s) of countertrade currently are/is: al it is practiced primarily in the communist countries of Eastern Europe. b/ the Japanese giant trading firms (sogo shosha) are masters of countertrade c/ companies generally prefer it over letter of credit transactions d/all of the aboveExplanation / Answer
1. D.
Explanation: In 1997, Korea, along with many Asian nations faced huge financial crisis fueled by overinvestment and capacity building, drop in price, the bankruptcy of conglomerates, and rising NPAs of banks. The government had to bail out the conglomerates using taxpayers' money. The banks also had to restructure the loans extended to the conglomerates.